Conditions and Measures on the Designation of High and New Techno-logy Enterprises in National High and New Technology Industry DevelopmentZones

Conditions and Measures on the Designation of High and New Techno-logy Enterprises in National High and New Technology Industry DevelopmentZones (Approved by the State Council on March 6, 1991 Promulgated by the State Science Commission in March, 1991) Whole Doc.

Article 1 These Measures are formulated to implement the relevant policy and provisions on the national high and new technology industry development zone approved by the high and new technology industry in our country.

Article 2 High and new technology enterprises in national high and new technology industry development zones (hereinafter referred to as the Development Zones) shall be identified and designated according to these Measures.

Article 3 Science and technology commission in each province, autonomous region, municipality, planned separate city (hereinafter referred to as science and technology commission at provincial and city level) shall be the authority in charge of the identification and designation of high and new technology enterprises in the Development Zones administered by the people's government of each province, autonomous region, municipality planned separate city, and shall be responsible for the implementation of these Measures. The Development Zone Office shall, under the leadership of the people's government and the leadership and supervision of the science commission at provincial and city level, specifically handle the examination and approval of the identification and designation of the high and new technology enterprises.

Article 4 According to the current development of science and technology in the world, high and new technology is divided into following categories: (1) microelectronics and electronic information technology; (2) space science and aerospace and aeronautical technology; (3) optoelectronics and optical, mechanical and electronic integra- tion technology; (4) life science and biological engineering technology; (5) material science and new materials technology; (6) energy science and new energy, high efficient energy conservation technology; (7) ecology and environmental science; (8) earache science and ocean engineering; (9) basic matter science and radiation science; (10) medical science and bio-medical engineering; (11) other new process or new technology applicable in the tradi- tional industries.

The categories of high and new technology shall be supplemented and amended from time to time according to the constant development inside and outside China, and shall be published by the State Science Commission.

Article 5 High and new technology enterprises shall be knowledge-intensive and technology-intensive economic enterprises. High and new technology enterprises within the Development Zones must meet the following conditions: (1) they are engaging in the research, development, production and sale of one or more high technologies within the scope of Article 4 and their products. However, pure commercial distribution of such technologies and their products are excepted; (2) they are practicing independent accounting, autonomous operation and bearing their own profit and loss; (3) the persons in charge of the enterprises with the research, development, production and sale of the products in their enterprises, and shall be the full time personnel of the enterprises; (4) scientist and technical personnel with college and university education shall account or more than 30% of all the staffs of the enterprises; scientists and technical personnel engaged in the research and development of high and new technology products shall account or more than 10% of all the staffs of the enterprises.

For those labor-intensive high and new technology enterprises engaging in the production or service of high and new technology products, scientists and technical personnel with college and university education shall account or more than 20% of all the staffs of the enterprises; (5) they have more than CNY 100000 yuan as their own funds, as well as appropriates places of business and facilities corresponding to their respective scale of business activities; (6) more than 3% of the gross revenue of the enterprises shall have been allotted as expenses of the research and development of high and new technology products; (7) the gross revenues of the high and new technology enterprises shall be composed of technology income, value of the high and new technology products, value of the ordinary technological products and technology-related trade. The aggregate of technological income and value of the high and new technology products shall account of more than 50% of the annual gross revenue of the enterprises.

Technological income shall mean income derived from technical consultancy, technology transfer, technology contributed as equity investment, technical services, technical training, technical engineering design and contracts, technology export, adoption and acquisition of imported technology and trial productions; (8) they have specific articles of association and strict technical and financial administration system; (9) their terms of operation shall be more than 10 years.

Article 6 An application for the establishment of high and new technology shall be submitted to the Development Zone Office, after the Development Zone Office has examined and determined, the application shall be approved and a "Certificate of High and New Technology Enterprise" shall be granted by the science and technology commission at provincial and city level.

Article 7 The Development Zone Office shall examine and verify the high and new technology enterprises according to the conditions set forth in Article 5 on a regular basis. Those high and new technology enterprises that do not meet the above conditions shall not be entitled to the policies and provisions of the national high and new technology industry development zone.

Article 8 The duration of those classified as high and new technology products shall be within 5 years, and duration of those high and new technology products that have a longer technological cycle shall upon approval be extended to 7 years.

Article 9 High and new technology enterprises that alter their scope of business, merge with or separate from other entities, charge their production line, redomicile or wind-up shall apply to the Development Zone Office for examination and approval, and shall undertake corresponding industrial and commercial and tax registration.

Article 10 Science research institutes with the ownership of the whole people in the Development Zones whose administrative and operational expenses have been reduced pursuant to the stipulations of the State, that practice independent accounting and that meet the conditions set forth in Article 5 may, upon verification by the Development Zone Office, be converted into high and new technology enterprises.

Article 11 These Measures shall replace Interim Provisions on the Conditions and Standards for the Designation of High and New Technology Enterprises promulgated by the State Science and Technology Commission.

Article 12 Science and technology commissions in each province and city shall adopt implementing rules based on these Measures. The existing implementing rules that do not conform to these Measures shall be amended in accordance with these Measures.

Article 13 The State Science Commission shall be responsible for the interpretation and amendment to these Measures.

Article 14 These Measures shall be implemented from the date of approval by the State Council.

Interim Provisions on Certain Policies Concerning National High and New Technology Industry Development Zones (Approved by the State Council on March 6, 1991 Promulgated by the State Science Commission in March, 1991) Article 1 These Provisions are formulated to further support the construction of high and new technology industry development zones in our country, and to push forward the development of high and new technology industry.

Article 2 These Provisions shall apply to high and new technology enterprises in the national high and new technology industry development zones, which have been designated pursuant to Conditions and Measures on the Designation of High and New Technology Enterprises in National High and New Technology Industry Development Zones made by the State Science Commission.

Article 3 These Provisions include various preferential policies except those of taxation.

Article 4 Preferential treatment on customs duties concerning the import and export of goods shall be handled as follows: (1) Import of raw materials and spare parts and components by high and new technology enterprises established in the high and new technology industry development zones for the manufacturing of export products shall be exempted from import license requirement, and the Customs shall clear the goods upon presentation of export contract and approval document of the high and new technology industry development zone.

(2) When approved by the Customs, high and new technology enterprises may set up bonded warehouse or bonded factories in the high and new technology industry development zones. The Customs shall, pursuant to relevant provisions on processing with imported materials, exempt import duty and product tax and value added tax for the import stage based on the actual manufactured and exported volume.

(3) Export products manufactured by the high and new technology enterprises shall be exempted from export duty except for those products whose export are restricted by the State or regulated by other provisions.

(4) If the goods under bonds are to be sold domestically, then approval from the original examination and approval authority and customs' permission must be obtained and duties shall be paid according to the law.

For those products that fall into the quota and import license administration by the State, the application for approval of import shall be submitted and approved and import license shall be applied for.

(5) For instruments and equipment that can not be produced domestically and are needed by the high and new technology enterprises for the development of high and new technologies, import duty shall be exempted by the Customs upon presentation of the approval documents of the examination and approval documents of the examination and approval authority which are examined and verified by the Customs.

When the Customs deem necessary, it may set up offices or station supervision and administration group in the high and new technology development zones to administer the import and export of goods.

Article 5 Provisions concerning import and export business.

(1) When approved by MOFERT, technology import and export companies may be established in the high and new technology industry development zones so as to promote he high and new technology industry development zones so as to promote the high and new technology products to enter into international market.

(2) Pursuant to relevant provisions of the State, those high and new technology enterprises that have a good record of conducting import and export business shall be granted rights to engage in foreign trade. When necessitated by business operation and approved by relevant department, high and new technology enterprises may set up branches and subsidiaries abroad.

Article 6 Provisions on funding and credits.

(1) The banks shall provide active support to the high and new technology enterprise, and shall endeavor to arrange funds needed in their development, production and construction.

(2) The banks may arrange the issuance of longterm bonds within certain quota by the high and new technology development zones so as to raise funds from the society and support the development of high and new technology industry.

(3) Relevant departments may establish venture capital funds for development of high and new technology products in the high and new technology industry development zones. In the more matured high and new technology industry development zones, venture capital companies may be set up.

Article 7 Capital construction project for the production and operation of the high and new technology enterprises shall be arranged for construction according to uniform planning, and shall be given priority in having the same included in local fixed asset investment scale.

Article 8 When approved by local people's government, high and new technology enterprises may be exempted from subscribing the bonds for State Key Construction.

Article 9 If all the indicators of the high and new technology products developed by the high and new technology enterprises have reached the level of the imported products of the same kind, and the high and new technology enterprises posses certain production capacity, after the review and determination by the State Science Commission and relevant department, such products shall be controlled pursuant to the existing import administration measures.

Article 10 New products development by the high and new technology enterprises whose prices are controlled by the State (including the prices fixed by the State and prices guided by the State), the enterprises may fixed the sales promotion prices by themselves and file the same with the price administration department and its superior department in charge within the prescribed sales promotion period, except that the prices of certain type of products shall be determined by the price administrative department.

The enterprises may fix the price of those high and new technology products which are not subject to the price control of the State.

Article 11 Instruments and equipment used by the high and new technology enterprises for the development of high and new technology and production of high and new technology products may adopt accelerated depreciation.

Article 12 Provided that the portion to be handed over to central treasury shall not be affected, when approved by local people's government, all taxes and charges paid by the high and new technology enterprises in 1990 shall be used as a base figure. Any additional taxes paid on top of that shall within 5 years be fully refunded to high and new technology industry development zones and shall be used for the construction of development zones.

Article 13 Business and technology personnel of the high and new technology enterprises who make multiple trips abroad shall follow the Guo Ban Fa (1990) No. 9 Document.

Article 14 When arranging employment and recruiting employees, each region and each department shall give prior consideration to the needs of high and new technology enterprises for graduate, post-graduate students and returned Chinese students and exports from abroad.

Article 15 The people's government of each province, autonomous region, municipality or planned separate city where high and new technology industry development zone arrived by the State are situated may adopt detailed implementing measures according to these Provisions.

Article 16 The State Science Commission and relevant department shall conduct periodic inspection to the high and new technology industry development zones. For those national high and new technology industry development zones that are poorly managed or whose progress are sluggish, the applicable preferential policies shall be terminated, or even the status of national high and new technology industry development zone shall be removed.

Article 17 The State Science Commission and relevant departments shall be responsible for the interpretation of these Provisions.

Article 18 These Provisions shall be implemented from the date of approval by the State council.